Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning Brew July 2 2024

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Summary:  Tesla - Phoenix or buy the rumor sell the fact!


Good morning,

US 10-year yields rose – apparently fueled on worries about a fiscal deficit under Trump after the debate last Thursday and the Supreme Court decision that presidents are largely immune.

At the same time equities traded mostly friendly with Tesla the main event at +6%. The Dow gained 0.13%, the S&P +0.27%, and the Nasdaq closed 0.8% higher. Apple gained 2.9%, Amazon 2.05% and Microsoft 2.2%. The Nikkei rose on the weak yen and broke above the 40k again.

The US Manufacturing PMI showed production fell for a third straight month, while prices paid fell to a six-month low. The USD Index rose to 105.87, EURUSD fell to 1.0730, GBPUSD 1.2637 and USDJPY to another high at 161.67.

Gold and Silver traded friendly yesterday to now trade at 2330 and 29.40, Bitcoin held on to its earlier gains at 63k.

This morning BYD posted a 21% rise in Q2 EV sales, the data from Tesla is expected today and it seems traders are looking for a positive surprise from the low analyst expectation of 438k vehicles. The stock gained 6% yesterday and rose above the 200 Day Moving Average

 

Today, focus will be on the EU Inflation as an ECB member hinted the interest rate cut was still a relatively easy decision, but subsequent moves should only come once inflation is clearly heading towards the 2% target. Watch EURUSD, EURCHF and the GER40.

Jerome Powell will be speaking at 15:30 at a policy panel

The Tesla production numbers will be closely watched and will either confirm or counter yesterday’s move.

With Thursday a US Holiday, expect liquidity to thin out and markets either calm or jumpy – this is especially true for Friday and the Nonfarm Payroll release.

 

The Q3 Outlook is ready:

https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook

  • Resilient economic growth: The US economy shows robust growth driven by investments in AI, defence, semiconductors, and obesity drug manufacturing, despite aggressive monetary policy rate increases and cooling labour markets in the US and Europe.
  • Persistent inflation: Inflation in the US and Europe remains higher than initially expected but is easing, and robust wage growth is contributing to an income-driven economic growth scenario, which is seen as a "goldilocks scenario" entering the third quarter.
  • Two-lane economy: Different sectors of the economy are experiencing varying impacts from high-interest rates, with sectors like real estate and car manufacturing struggling, while defence, semiconductors, AI, and obesity drug manufacturing are booming, complicating monetary policy decisions.
  • Investment outlook: The short-term investment outlook is positive, favouring risky assets due to calm financial markets and a low financial turbulence indicator. Recommended asset allocations include being overweight in equities and commodities, European equities, and sectors like energy, healthcare, financials, and information technology. We also like short-term government bonds and high quality corporate bonds.
  • Commodity and FX views: The energy and grains sectors are expected to perform well, with robust demand for crude oil and grains recovering from adverse weather conditions. In the FX market, risk-on currencies like AUD and NZD are expected to outperform in a bearish dollar environment, while low-yielding currencies like JPY and CHF are likely to underperform.

 

 

 

 

Tuesday

  • EU Inflation, Unemployment, Powell speaks

Wednesday

  • DE Industrial Orders, US Initial Jobless Claims, Fed Minutes, John Williams Speaks

Thursday

  • US Holiday, UK Election, DE Industrial Orders

Friday

  • DE Industrial Production, UK House Prices, Swiss FX Reserves, US Nonfarm & Unemployment, Canada Labor Market Data

 

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • 350x200 peter

    Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • 350x200 althea

    Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • 350x200 peter

    Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • 350x200 charu (1)

    FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • 350x200 ole

    Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.